TMI Blog2024 (4) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... s, confirmation from the suppliers, audited books of accounts, quantitative tally of purchase and sale etc. It is also a fact that the suppliers from whom the assessee purchases gold/bullion confirmed the transactions in response to notices issued u/s. 133(6) of the Act. Pertinently, no deficiency or discrepancy was found either in the books of accounts maintained by the assessee or the documentary evidences furnished. This is so because, neither the AO nor the FAA have returned any adverse inference, either in relation to the books of accounts maintained by the assessee or the documentary evidences furnished. Merely, because the notices issued u/s. 133(6) and summons issued u/s. 131 returned unserved or remained unanswered, cannot lead to the conclusion that sales are bogus, when there are overwhelming documentary evidences brought on record in the form of audited books of accounts, stock register, item wise purchase and sales, VAT return, VAT assessment order accepting the sale transactions to demonstrate that the assessee indeed has effected the sales. In respect of sales made to M/s. RBPL the addition in our view was made purely on conjectures and surmises - Admittedly, the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unexplained cash credit u/s. 68 - It is quite patent and obvious that provisions contained u/s. 68 and 69 of the Act operate in different situations and conditions therein are also different. Therefore, when it was never the case of the Department that the disputed addition has to be treated as unexplained investment u/s. 69 of the Act, at the second appellate stage, a new dimension cannot be given to the disputed issue by converting the addition from section 68 to section 69, that too, without providing an opportunity of being heard to the assessee. More so, when applicability of section 69 was never within the purview of the Tribunal and not even the case of the Department. Revenue, though, had fairly agreed that provisions of section 69 cannot get attracted, however, he urged and pleaded that the addition made u/s. 68 of the Act should be sustained - aforesaid contention of learned Standing Counsel is unacceptable considering the fact that the mandate given to me as Third Member is very limited in its scope and I have to agree with the view expressed by one of the Members. In the facts of the present appeal, learned Accountant Member has given a clear cut finding that no additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Assessee firm have categorically admitted that there is no movement of goods and it was introduction of unaccounted amount to the Assessee's bank account, can the assessee claim the such 'sales' as 'Genuine one'?. 3. Whether on facts by circumstances of case and in law, the lower authorities were justified in holding that the transactions of sales are not genuine, making addition based on the finding that the Assessee has not satisfactorily proved the existence of such stock before sales and delivering of goods after such 'Sales'? 4. On facts by circumstances of case and law and in view of the specific admissions of the partners of the Assessee that there is no movement of goods and it was introduction of unaccounted amount to the Assessee's bank account, whether the lower authorities were justified in holding that provisions u/s 68 of the Act is applicable with regard such claimed 'sales' as bogus sales', wherein the genuineness of sale transactions are not explained satisfactorily and same is to be taxes u/s 68 or alternatively u/s 69 of the Act?. 4. As could be seen from the question proposed, basically, there are two issues ari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer, that though notices u/s. 133(6) of the Act as well as summons u/s. 131 of the Act were issued, the concerned entities, who supposedly purchased gold and bullion from the assessee, however, no information came from such entities as most of the summons returned back un-served. He also observed that, as per the information available, those 44 entities had never done any purchases from the assessee except during the period of demonetization. He also referred to the statement recorded from Shri Kapil Kumar and Shri Ashwini Singla the partners of the assessee firm wherein they not only admitted that the document containing list of credit and debit entries found from the e-mail id of Shri Deepak Jain, the accountant of the partners, belong to the assessee, but they further stated that they were approached by Shri Sonu Punjabi, Nitin and Jeetu to introduce cash into various fake concerns/firm/proprietorship concern on commission basis. 7. Based on the information available on record the Assessing Officer finally concluded that sales of gold/bullion amounting to Rs. 49,19,43,623/- to 44 entities allegedly controlled by Shri Sonu Punjabi, are bogus sales and made for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n amount of Rs. 90,30,000/- was deposited in cash on 24.11.2016 and on the same day cash of Rs. 90,30,000/- was transferred to the account of the assessee. From the aforesaid facts, he concluded that the purported sale of gold and bullion amounting to Rs. 90,30,000/- to M/s. Olivia Tradelinks India P. Ltd., is bogus. Accordingly, he treated the amount in dispute as unexplained cash credit u/s. 68 r.w.s 115BBE of the Act and added back to the income of the assessee. Similarly, he treated receipts of Rs. 1,19,20,793/- from M/s. S.S Overseas as bogus sales and held it as unexplained cash credit u/s. 68 r.w.s. 115BBE of the Act. Thus, in aggregate, the Assessing Officer added back an amount of Rs. 72,15,97,386/- u/s. 68 of the Act, while completing the assessment. 9. Against the assessment order so passed, assessee preferred in appeal before ld. Commissioner (Appeals). In course of hearing of appeal before ld. First Appellate Authority, the assessee furnished further documentary evidences to prove the identity of the purchasers; their creditworthiness as also the genuineness of the transaction. However, ld. Commissioner (Appeals) did not find merit in the submissions of the assessee, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t respond to notice issued u/s. 133(6) of the Act, or summons u/s. 131 of the Act, the sales cannot be treated as bogus. As regards the statement recorded from partners of the assessee firm, ld. Counsel submitted, they are not at all relevant for the disputed addition nor the Assessing Officer himself, has relied upon them while making the addition. Without prejudice, he submitted, under no circumstances the addition can be made u/s. 69 of the Act, as has been done by learned Judicial Member, as it was never the case of the Assessing Officer or learned Commissioner (Appeals). Thus, he submitted, at this stage a new dimension cannot be given to the issue in dispute by converting the addition from section 68 to section 69 as the conditions of both the sections are totally different. Thus, he submitted, since the view taken by learned Accountant Member is the correct view, it should be accepted. In support, he relied on the following decision. 11. Per contra, learned Standing Counsel appearing for the Revenue strongly relied upon the observations of the Assessing Officer and learned First Appellant Authority. Drawing our attention to the observations made in the Assessment Order and F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , sales worth Rs. 37 crores made during the demonetization period have been accepted by the Departmental Authorities. The Assessing Officer has identified and made additions in the following four categories of alleged sham transactions: (i) sales to 44 entities purportedly belonging to Shri Sonu Punjabi - Rs. 49,19,43,623/- (ii) sales to M/s. Ringing Bells Pvt. Ltd., - Rs. 20,87,02,970/- (iii) sales to M/s. Olivia Tradelinks India P. Ltd., - Rs. 19,30,000/- (iv) sales to M/s. S.S Overseas - Rs. 1,19,20,793/- 13. The reasons based on which the Assessing Officer has treated the sales as bogus and added them u/s. 68 of the Act by treating them as unexplained cash credit have been discussed in detail earlier. Therefore, it needs to be examined whether the assessee has been able to satisfy the three ingredients of section 68 of the Act i.e, identity, creditworthiness and genuineness of the transaction. As far as the sales of Rs. 49,19,43,623/- alleged to have been made to bogus entities controlled by entry operator Shri Sonu Punjabi, it is observed that in course of assessment proceeding as well as before the First Appellate Authority the assessee has furnished various documentary evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus, when the assessee has maintained item wise purchase and sale details as well as stock register and, moreover neither in course of survey any stock discrepancy was found nor any unaccounted cash was found, certain sales cannot be treated as bogus. More so, when one of the directors of RBPL has stated before the Assessing Officer that he had taken delivery of gold/bullion purchased from assessee. 15. Similar is the factual position qua the sales effected to M/s. Olivia Tradelinks India P. Ltd., and M/s. S.S Overseas, as, the assessee has furnished all documentary evidences to prove the identity, creditworthiness and genuineness of transaction. Thus, the assessee has sufficiently discharged the initial burden cast upon it to prove the credit entries appearing in the books of account. In fact, learned First Appellate Authority has accepted the fact that the assessee has discharged the initial burden cast upon it. Once it is established that the initial burden cast upon the assessee has been discharged, the burden shifts to the Assessing Officer to conclusively prove that the credit entries appearing in the books of accounts are unexplained in terms with section 68 of the Act. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explanation offered is not acceptable. 19. In the facts of the present appeal, it is an admitted factual position that the disputed transactions are duly recorded in the books of accounts of the assessee. Therefore, at the very threshold the provisions of section 69 will not get attracted. In fact, learned Standing Counsel appearing for the Revenue fairly accepted aforesaid factual and legal position. In any case of the matter, both the Assessing Officer and learned First Appellate Authority have proceeded on the premise that the credit entries appearing in the books of account are unexplained cash credit u/s. 68 of the Act. It is quite patent and obvious that provisions contained u/s. 68 and 69 of the Act operate in different situations and conditions therein are also different. Therefore, when it was never the case of the Department that the disputed addition has to be treated as unexplained investment u/s. 69 of the Act, at the second appellate stage, a new dimension cannot be given to the disputed issue by converting the addition from section 68 to section 69, that too, without providing an opportunity of being heard to the assessee. More so, when applicability of section 69 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
